Military families are planning ahead for their 2025 finances in an uncertain economy. In the latest edition of America’s Defense Communities magazine, JJ Montanaro, a certified financial planner at USAA, gave tips for how service members and military families can plan for the future.

ADC: USAA’s mission is to help military families build financial security. What does that look like in today’s world?

Montanaro: Today, the world is complex and fast-paced. For military families, the added challenges of their lifestyle—PCS moves, deployments, spouse un- and underemployment—just compound the environmental challenges like inflation and a difficult housing market. The fundamentals of financial security—managing cash flow and credit, saving and investing, and a plan that ties it all together—remain the same as they were nearly 30 years ago when I left active duty and started in the business. It’s just harder.

ADC: What are some of the most common financial mistakes service members and their families make, and what can be done about them?

Montanaro: At USAA, we think that doing the basics right, what we call our “core advice” is critical to financial security. Living a lifestyle where you spend less than you earn and you save consistently is a key component of that core advice. However, that doesn’t just magically happen. It takes a concerted effort and for families, a united effort. I always encourage the folks I interact with to be more deliberate and purposeful in how they approach money and money decisions.

ADC: What strategies has USAA found to be effective in promoting financial literacy and budgeting best practices in the military community?

Montanaro: Our financial readiness program is designed to assess where a member is at—what they are doing well and where they might be able to improve—and providing very manageable and attainable “next steps.” There is nothing like success to breed more success. Let’s face it, the natural reaction to someone telling me I have a 57-page list of items to address is to throw up my arms and do nothing.

ADC: The USAA Educational Foundation recently partnered with the Military Spouse Advocacy Network (MSAN) to introduce a new virtual financial education program. Tell us about that program and why promoting financial literacy for military spouses is part of USAA’s mission.

Montanaro: USAA is proud to sponsor the USAA Educational Foundation that provides free financial education resources tailored to the needs of the military. We know that often times, the CFO of the military household is the spouse, so the USAA Educational Foundation partnered with MSAN, a 501(c) (3) nonprofit, to provide free resources to help better manage the military wallet. The USAA Educational Foundation has lots of free resources on all the major personal finance topics at usaaef.org.

ADC: What are some of the challenges service members face when transitioning out of the military? 

Montanaro: It’s a big move, but it’s also inevitable. We know it will happen, but we don’t necessarily control the timing. Work fuels most families’ financial engine. That makes finding a meaningful career the number one challenge. Specific to finances, I was talking to our advice team about our point of view that service members should accumulate the equivalent of six to 12 months of expenses prior to leaving the military. The idea is sound: accumulate enough to “buy time” to allow you to choose the right career, not just choose a job out of necessity. While that number makes financial sense, it’s probably not practical or possible for most military members or families. So, that’s a challenge. But, even if they don’t have the full 6-12 months, any amount they have saved will help reduce stress during the transition to civilian life. We also encourage transitioning service members to consider and plan for potential budget additions to replace lost benefits like Servicemembers’ Group Life Insurance and health care.

ADC: How can defense communities support military families on their financial journeys? 

Montanaro: Financial literacy and education provide the foundation for financial security. To that end, supporting programs and initiatives across the community that promote and enable programs in this arena is critical. The military is a microcosm of our society. A better educated and more financially savvy community will be a good thing for our communities and for our military.